Rock, scissors, paper: the problem of incentives and information in traditional Chinese state and the origin of Great Divergence
This article posits that the political institution of imperial China – its unitary and centralized ruling structure – is an essential determinant to China‘s long-run economic trajectory and its early modern divergence from Western Europe. Drawing on institutional economics, I demonstrate that monopoly rule, a long time-horizon and the large size of the empire could give rise to a path of low-taxation and dynastic stability in imperial China. But fundamental incentive misalignment and information asymmetry problems within its centralized and hierarchical political structure also constrained the development the fiscal and financial capacity of the Chinese state. Based on a reconstruction of two millennia records of incidences of warfare, this paper develops a narrative to show that the establishment and consolidation towards a single unitary monopoly of political power was an endogenous historical process. Using data series on warfare and government revenue for 17-19th century, I illustrate the Qing imperial rule as an epitome of the traditional Chinese political economy.
|Date of creation:||Jul 2011|
|Date of revision:|
|Contact details of provider:|| Postal: LSE, Dept. of Economic History Houghton Street London, WC2A 2AE, U.K.|
Phone: +44 (0) 20 7955 7084
Web page: http://www.lse.ac.uk/economicHistory/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- North,Douglass C. & Wallis,John Joseph & Weingast,Barry R., 2013.
"Violence and Social Orders,"
Cambridge University Press, number 9781107646995, Junio.
- North, Douglass C. & Weingast, Barry R., 1989. "Constitutions and Commitment: The Evolution of Institutions Governing Public Choice in Seventeenth-Century England," The Journal of Economic History, Cambridge University Press, vol. 49(04), pages 803-832, December.
When requesting a correction, please mention this item's handle: RePEc:ehl:wpaper:37569. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (LSERO Manager on behalf of EH Dept.)
If references are entirely missing, you can add them using this form.